00 — Overview & VerdictExecutive Summary: A Real Recovery, Deal-Influenced but Not Deal-Driven

The five tests of "real surge versus big deals"

Table 0.1. Sources: BoT/TISEZA/NBS Tanzania Investment Report 2025; UNCTAD WIR 2025 and 2026; TISEZA. Percentages computed by TICGL.

The research question, hypothesis and method

Four channels through which headline FDI can rise (and why quality differs)

A genuine surge should show up across several channels and across many firms and sectors, not in one. The method is a mixed diagnostic: time series, composition data, trade statistics and case studies. History covers 2020–2025 (2020 captures the COVID-19 shock) and the outlook 2026–2031. The tests examine the level and trend of flows, composition, concentration by sector and source, visible ownership-transfer effects, and how much of the registered pipeline converts into inflows.

Key findings

• Growth, then plateau. FDI rose 82% from USD 944M (2020) to about USD 1.72B (2025) but has been flat since 2023.
• Mostly reinvestment. 55% of 2020–24 FDI was reinvested earnings and only 25% fresh equity; new cash fell 41% in 2024.
• Concentrated and partly distorted. Four sectors and ten source countries take about 74% and 65% of inflows; ownership transfers (UK, 2024) and loans (2023) distort the series.
• Registrations are not inflows. A record USD 10.95B was registered in 2025, but only ~16% (37–45% adjusted) shows up as FDI; the gap grew from USD 4.0B to USD 9.2B in two years.
• The big-deal pattern is elsewhere. Africa's 2024 surge was one deal (Ras El-Hekma); Tanzania shows no comparable single transaction.
• Trade tells the same story. Exports grew 82% but imports 109% in 2020–2025; only about a quarter of the current account deficit is covered by new FDI cash.
• LNG is the only big deal in the horizon. It is pre-FID and should be treated as upside, not baseline.

01 — Level & TrendHow Big and How Real Is the Flow? Test 1: Trend

Test 1 asks whether Tanzania's FDI has kept rising or has stalled, in nominal terms, against the stock of foreign capital and against the size of the economy. The short answer: it recovered strongly from the 2020 shock and then flattened, and relative to GDP it has fallen.

1.1 FDI inflows, 2020–2025

Table 1.1. Source: BoT/TISEZA/NBS Tanzania Investment Report 2025 (Table 4.1); UNCTAD WIR 2026 for 2025 (press coverage rounds it to USD 1.71B). "New cash" is TICGL's sum of equity excluding retained earnings and loans from related parties.

In nominal terms 2024 inflows (USD 1.66B) are only marginally above 2015 (USD 1.56B on the same BoT series, +6%), so the rise is a recovery from the 2016–2018 trough, not a new level. FDI relative to the economy is falling: about 2.0–2.2% of GDP in 2024 and roughly 1.9% in 2025 (USD 1.72B on a USD 91.8B GDP), far below the 5.66% reported for 2010.

1.2 FDI stock

Table 1.2. Sources: BoT/TISEZA/NBS Tanzania Investment Report 2025 (2021–2024); 2025 from the UNCTAD factsheet roll-forward. TICGL calculation of the residual. The 2025 stock equals the 2024 stock plus the 2025 flow exactly, so it appears to be a roll-forward, not a measured stock.

The stock rose by about USD 7.7B between 2021 and 2025, faster than cumulative flows, because it includes valuation changes, exchange-rate effects and retained foreign capital. Mining holds USD 9.8B (45.2%) of the 2024 stock, followed by manufacturing (USD 3.3B), ICT (USD 2.9B) and finance (USD 2.5B).

02 — CompositionWhat the Headline Is Made Of: Test 2

Headline FDI mixes very different things. Reinvested earnings are profits of existing foreign firms retained in Tanzania; intercompany loans are lent by parent companies and can be repaid; fresh equity is new money. Only the last two together are "new cash".

Table 2.1. Reinvested earnings are the BoT shares applied to headline FDI; 2021 differs from the sum by USD 2M of rounding. Source: BoT/TISEZA/NBS; TICGL/TERI calc.

• 55% of 2020–2024 FDI is reinvested earnings (USD 3.8B of USD 6.9B): profits of existing foreign firms retained in Tanzania. They signal confidence, but under balance-of-payments rules they are booked both as income owed to the foreign owner and as an FDI inflow, so they bring no net foreign exchange.
• Fresh equity is only 25% (USD 1.7B in five years) and fell to USD 291M in 2024, 17.5% of that year's FDI.
• The 2023 high was a loan event: intercompany loans of USD 711M (43% of the year). In 2024 they fell to USD 258M as earlier borrowings were repaid, so the headline stalled while reinvested earnings hit a record USD 1.1B.
• Profits are rising faster than new capital: foreign investors earned USD 2.18B after tax in 2024, declared only USD 496M in dividends and retained the rest.

03 — Sectors & SourcesWho Is Investing and Where? Test 3 (Concentration) and Part of Test 4

3.1 Concentration by sector

Table 3.1. Source: BoT/TISEZA/NBS Tanzania Investment Report 2025; TICGL/TERI calc. of shares.

Reading: mining dependence is easing, but the replacement is largely reinvestment inside finance rather than a new wave of external capital. Diversification toward agriculture, construction and transport is visible, from small bases. Health and education remain close to zero.

3.2 Source countries: ownership transfers inside the numbers

Table 3.2. Source: BoT/TISEZA/NBS Tanzania Investment Report 2025 (Appendix II).

Cayman Islands and Canada together supplied 63%, 38% and 35% of FDI in 2020–2022, then almost nothing in 2023–2024, while the UK jumped to USD 500M. The Bank of Tanzania attributes the UK rise to the acquisition of mining shares previously held by Canadian and Cayman shareholders. Part of the recorded 2024 shift in sources is therefore a change of ownership, not new capital from a new region. The rises from the UAE (USD 168M) and South Africa (USD 247M) are genuine new-source signals, but each is a single-year step to be confirmed in 2025 data.

04 — Big Deals & PipelineAre Big Deals Driving the Numbers? Tests 4 and 5

4.1 Channel-by-channel assessment

Table 4.1. Source: BoT/TISEZA/NBS Tanzania Investment Report 2025; TanzaniaInvest for flagship projects (reported, not verified against TISEZA registers).

4.2 The balance of evidence

4.3 The pipeline: a surge in registrations, not in flows (Test 5)

Table 4.3. Sources: TISEZA (Ministry of Planning and Investment, June 2026); BoT; UNCTAD. Gap = registered value minus actual FDI (TICGL/TERI calc.); average size = value ÷ projects.

Why the headline ratio is too pessimistic, and why the gap is still real

• The denominator includes local capital. In 2025 only 442 of 915 projects were foreign-owned; 284 were local and 182 joint ventures. TISEZA bulletins put foreign-owned projects at roughly 43–52% of registered value.
• The numerator includes reinvested earnings of firms that never appear as new registrations.
• Timing: registered projects take years to disburse, so same-year ratios understate conversion.

Reading: the registration surge is a breadth story (average project size is stable at about USD 10–12M, so it is not driven by mega-projects), but conversion to new foreign cash is low. Even after adjusting for ownership and timing, only about 4 in 10 foreign registered dollars appear as FDI, and well under 1 in 4 as new cash. Registration is an intention indicator, not an investment indicator.

05 — Global & Regional CasesWhat a Deal-Driven Surge Looks Like, and What Turns Deals into Development

5.1 Global context

Table 5.1. Sources: UNCTAD WIR 2025 and 2026 and Global Investment Trends Monitor (as compiled by the TICGL team); BoT Tanzania Investment Report 2025.

Reading: globally the surge is real in value but narrow in breadth, which is the signature of a deal-driven recovery. That frames the test for Tanzania.

5.2 Africa and East Africa: what a deal-driven surge looks like

Table 5.2. Sources: UNCTAD WIR 2025 and 2026 regional chapters; East African, Ecofin and Ahram Online reporting on WIR 2026.

Reading: in these countries the biggest swings come from a handful of identifiable projects. Tanzania's series has no transaction of that size; its profile is steady, small-step flows made mostly of reinvestment. Tanzania was fifth in the 2025 regional listing, behind Ethiopia, Uganda, Kenya and DR Congo.

5.3 Development-path cases: what turns big deals into broad-based investment

Table 5.3. Source: TICGL research drafts (qualitative synthesis).

06 — Trade & Current AccountIs Capital Building Productive and Export Capacity? A Second Test

If FDI expands productive investment, exports, value addition and diversification should rise faster than imports. Trade is therefore a cross-check on the FDI story.

6.1 Global trade backdrop

Table 6.1. Source: WTO (as compiled by the TICGL team). Africa's imports are forecast to grow faster than exports, so productive capacity must grow for the gap not to widen.

6.2 Tanzania merchandise trade

Table 6.2. Source: NBS and Ministry of Finance Economic Survey as compiled by TICGL; deficit is exports minus imports as shown.

• Exports rose 82% (TZS 13.9tn to 25.3tn) and in USD from 9.12B in 2024 to 10.26B in 2025 (+12.5%), led by gold, manufactured goods, horticulture and regional trade. The team brief records gold exports of about USD 3.4B in 2024 rising to USD 4.7–5.6B in 2025–2026, and a services surplus (travel, transport) that offsets part of the goods deficit.
• Imports rose 109% (TZS 19.6tn to 41.0tn), driven by capital goods, fuel, machinery and intermediate inputs for infrastructure and industry. In 2025 imports were flat (+0.1%) and exports grew 12%.

6.3 What FDI actually covers

Table 6.3. Source: BoT/NBS (Tanzania Investment Report 2025, Table 2.1); TICGL calculations.

Because reinvested earnings add no net foreign exchange, only about a quarter of the current account deficit is financed by genuinely new FDI cash; the rest relies on borrowing, tourism, gold earnings and reserves. Trade confirms the pattern seen in FDI: growth is real, but concentrated in gold and tourism and dependent on imported capital goods. Converting investment into export capacity and local value addition is the test.

07 — LNG & Outlook 2031The Big Deal That Could Change the Answer, and Three Scenarios to 2030/31

7.1 Tanzania LNG

Illustrative scale (not a forecast)

If USD 42B were spent evenly over a six-year build (2028–2033), project spending would average about USD 7B a year. How much is recorded as FDI depends on financing: equity and intercompany loans from foreign partners count as FDI, third-party project finance and the state's (TPDC) share do not. At an illustrative 30–60% FDI-classified share, LNG would add roughly USD 2–4B a year to recorded FDI, doubling the baseline. This arithmetic shows order of magnitude only.

7.2 Outlook by area

7.3 Scenarios for annual FDI by 2030/31

*TICGL calculation over five years using mid-points (2.15, 4.0, 7.0). Scenarios are TICGL estimates, not BoT, IMF or UNCTAD forecasts. The realisation ratios use the headline (registered value) basis.

Reading the scenarios

• Reconciling earlier drafts: a baseline of USD 2.0–2.5B by 2031 with an accelerated case above USD 3B (assuming LNG, minerals processing, ports and industrial parks reach close), and an ambitious reform case of USD 4–7B at 40–60% realisation without any mega-deal, are consistent with the table above once the LNG overlay is treated separately.
• Consistency: on a USD 10.95B pipeline, 15% gives USD 1.6B, 35–40% gives USD 3.8–4.4B and 55–70% gives USD 6.0–7.7B.
• The target needs more than reform: USD 10–15B a year is 91–137% of the 2025 pipeline. It requires the pipeline to roughly double with higher conversion, or LNG and other megaprojects to enter the statistics.
• Macro risk: higher oil prices raise the import bill and pressure the current account; tighter global financing delays project decisions.
• Strongest sectors: critical minerals and processing, energy (gas and power), ports and logistics, agro-processing, tourism and digital infrastructure.

08 — Policy & TICGLPolicy Implications: Fix Conversion and Composition, Not Just Attraction

The evidence points to a conversion and composition problem more than an attraction problem. The objective should be to raise new-cash FDI and the share of registered projects that disburse, to turn big deals into wider spillovers, and to prepare for LNG without relying on it.

Conclusion

Tanzania has moved from the COVID-19 shock to a period of steady, real recovery in capital inflows, visible in balance-of-payments data, the FDI stock and the region's growth rankings. It is not, however, a broad-based surge of new greenfield equity: it is built mainly on reinvestment by existing investors and intercompany loans, concentrated in a few sectors, and accompanied by a large and widening gap between registered and realised investment.

Whether 2027–2031 brings a genuine surge will depend less on new announcements and more on converting the existing pipeline into disbursed capital, attracting a larger share of fresh equity, linking investment to export capacity and local value addition, and managing large deals, above all LNG, so that they create wider spillovers. The central policy task is conversion and diversification, not merely attraction.

How TICGL and TERI can help

TICGL (Tanzania Investment and Consultant Group Ltd), with its research arm TERI, turns investment data like this into decision tools: bankable project pipelines, feasibility studies and financial models, market-entry support and economic intelligence.